Which of the following option influences

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Which of the following option influences the "Keynesian Investment Multiplier"?

Options:

Expenditure level

Marginal efficiency of capital

Marginal propensity to consume

Income level

Correct Answer:

Marginal propensity to consume

Explanation:

The correct answer is Option 3: Marginal propensity to consume

The formula for Keynesian Investment Multiplier is:

k = \(\frac{1 }{\text 1 - MPC }\)

Thus, any change in value of MPC would cause an influence on "Investment multiplier".